RBI Holds Rates Amid US Tariff Uncertainty
The Reserve Bank of India held key interest rates at 5.5% amid US tariff concerns and past rate cuts. Governor Sanjay Malhotra hinted at future easing to support growth against trade uncertainties, while domestic factors remain robust. Inflation forecasts have also been reduced due to lower food prices.
- Country:
- India
In a move influenced by global economic uncertainty, the Reserve Bank of India (RBI) decided to maintain its key interest rates at 5.5% on Wednesday, as it evaluates the impact of US tariffs on the domestic economy. This decision follows prior rate cuts and recent tax reductions.
Sanjay Malhotra, the RBI Governor, indicated potential rate easing in the upcoming months to cushion the economic impact of US tariffs. The monetary policy committee, consisting of six members, unanimously agreed on keeping the rates unchanged, maintaining a neutral policy stance.
The decision showcases the RBI's attempt to navigate subdued inflation and possible growth risks due to US tariffs, while supporting the economy. The RBI adjusted its GDP growth forecast upwards to 6.8% for the fiscal year, considering factors like a good monsoon and GST reforms, but acknowledged potential trade-related challenges.
(With inputs from agencies.)
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